June 14, 2008

Northshore Mining Co. Celebrates Reopening of Furnace No. 5

By Peter Passi, Duluth News-Tribune, Minn.

Jun. 14--Silver Bay will celebrate the rebirth of a taconite plant's furnace Thursday night with a picnic and tour of Northshore Mining Co.

In mid-March, Northshore restarted Furnace No. 5 -- a piece of equipment that last produced pellets more than a quarter-century ago.

"We've shaken out a lot of the start-up bugs now, and it's running well," said Scott Gischia, Northshore's manager of environmental services. "We're seeing good production rates and good quality."

The rejuvenated line brought30 additional jobs to Northshore, which employs 549 people.

The furnace also will boost Northshore's annual production capacity by about 800,000 tons. That's an increase equivalent to 13.6 percent of the plant's total production in 2007.

"This shows us the commitment that Cleveland Cliffs is making to Northshore Mining and the community," Silver Bay Mayor Scott Johnson said. "It means more jobs and more stability for our local economy."

Bringing the line back into service required about a $40 million investment, said Maureen Talarico, a spokeswoman for Cleveland Cliffs Mining Co., which owns Northshore.

Furnace No. 5 was refurbished, equipped with modern controls and now bakes pellets at a temperature of 2,350 degrees.

"There's been a lot of excitement to see this old equipment come back to life again, especially for some of the people who were around back when it originally shut down." Gischia said.

The furnace was idled in 1982, a period of slumping domestic steel production and hard times on the Iron Range.

"The market really was crashing at the time, and Reserve was throttling back," Gischia said.

Furnace No. 5, built in 1955, was one of the original pieces of equipment from Reserve Mining Co., the first commercial-scale taconite plant to begin production on the Range. Reserve declared bankruptcy in 1986.

Johnson still recalls those dark days.

"I was on the City Council when the plant closed, and about one in every three houses in town was either for sale or was in foreclosure," he said.

But Silver Bay has rebounded with the mine, Johnson said.

Cyprus Minerals Co. acquired, restructured and reopened the operation in 1989. Then, in 1994, Cleveland Cliffs took control.

At one time, Reserve had eight furnaces, but only four remain. All four of those surviving furnaces are running full out.

"It's a reflection of a strong market and a reflection of all the employees who work at Northshore," Talarico said of Cleveland Cliffs' recent reinvestments in the Silver Bay plant.

Cleveland Cliffs isn't the only mine working to boost production. Earlier this year, U.S. Steel Corp. announced plans to invest more than$300 million in Keetac, adding 3.6 million tons to the Keewatin plant's capacity.

If you go

What: Celebration of Northshore Mining's restart of Furnace No. 5

Where: Silver Bay

When: 5 p.m. Thursday

Features: A complimentary picnic with tours of the facility to follow

PETER PASSI covers business and development. He can be reached weekdays at (218) 279-5526 or by e-mail at [email protected]


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